Dr. Mark Lutter
"Winner-Take-All" Markets in the Creative Industries
In winner-take-all markets, the goods and services offered differ only slightly in quality, but their success on the market is extremely disparate. The number of winners is scant compared to the legions of losers. In this market, performance, quality and talent do not translate proportionately into success - performance and success go their separate ways. An artist earning more than one hundred times the average income does not necessarily have a hundred times more talent. Because the chances of succeeding are so small, the likelihood of earning an above-average income - or of surviving on the market at all - is slim. What motivates the people who decide to venture into these markets? What factors influence their decision to invest? How do winner-take-all markets evolve? This research project aims to answer these questions both theoretically and empirically, focusing primarily on the social forces behind the development of these markets and their participants’ vastly uneven prospects for success. Empirically, the project examines markets in the creative industries, drawing on structural data from the film industry and standardized surveys of artists, musicians, actors, and other creative professionals.
Demand Structure and Distributional Effects of the Lottery in Germany (with Jens Beckert)
With an annual turnover of over 25 billion euros, the gambling market is a significant factor in the German economy. Along with casinos, the lottery is the largest single market. The lottery is exceptional as a market because the commodity traded in it has an expected negative monetary utility for consumers. Since less than 50 percent of the receipts are distributed as winnings, lottery tickets have a lower expected utility than their purchase price. How can it be that there is demand on this market? Four different explanatory approaches are to be tested within the framework of the project: the meaning of irrational decision motives, functionalist theories of tension management, approaches proceeding from the situation-determined rationality of buying a lottery ticket, and network-analytical explanations emphasizing the social second-order effects of playing the lottery (contact possibilities). In comparison with the USA, the project also investigates the prevalent normative perspectives on playing the lottery and examines ist possible redistributional effects. This raises the question of whether lottery ticket taxation can be seen to produce regressive distributional effects. A representative survey will be conducted in Germany to provide data for the project.